Avino Expansion & Operational Update - Seite 2

Initial mining for mill feed will be from levels 11.5 and 12 with start date of late August/early September. Development of the ramp to lower levels (down to level 17) will continue separately with an additional mining crew.

Processing Plant Expansion

• Scalping screen has been installed and is now operating
  
• Product screen is scheduled for installation later this month and preparatory work is now being done to minimize crushing plant downtime
  
• A large quantity of crushed mill feed has been stockpiled to ensure both mill circuits operate during the scheduled crusher downtime period
  
• Mill liners for the large ball mill have arrived and are ready to install
  
• Purchase order for first fill of grinding balls has been issued
  
• Mill electrical starter to be wired in later this month
  
• Mill clutch to be installed in September
  
• Thickener mechanism with bridge has been installed in tank; installation of the rakes and tank launder modification work are currently underway.
  
• Foundations for the filter press have been poured; the filter has arrived in Manzanillo and is awaiting customs clearance.
  
• Circuit #3 should be ready for commissioning in the 4th Quarter as scheduled.

Surface and Infrastructure

There has been a delay with the permit for the construction of the power line due to changes in personnel in the Ministry's office following a recent election. The new schedule calls for completion of the power line sometime in February 2015. Caterpillar has been approached to supply a 1.5 to 2 mW generator for circuit #3 in the interim.

GeoQuality has completed the new tailings storage facility study and the draft report has been issued for comment. Once complete, the report will be submitted in support of our permit application and the design will be used for the basis of the construction cost estimate to build the new tailings facility.

San Gonzalo Mine

At the San Gonzalo mine, exploration drifting on the vein on level 4 to the Southeast has been halted pending the completion of the raise from the 5th level to provide better ventilation. The drift has advanced a total of 121 metres from the cross-cut to the ramp. This is a new zone that was not included in the Tetra Tech resource estimate and was reported in our news release of June 5^th 2014. This new zone on level 5 has advanced a distance of 182 metres from the cross-cut where the vein has split. The splay is just as wide as the main vein of 2.5 metres. Drifting and sampling of this new zone on level 6 will commence once the by-pass access ramp to the vein has been completed.